US Deficits To Keep Growing... 1/3 Of $34T Debt From Last 4 Years Alone

[Economy 52,837]

https://www.cnbc.com/2024/05/19/soaring-debt-and-deficits-causing-worry-about-threats-to-the-economy-and-markets.html

 

The US deficit is expected to be 5.6% of GDP in 2024. A high number normally only expected during deep recessions. Additionally $11T of the $34T debt (or roughly 1/3 of it) was accumulated in the last 4 years alone

 

If nothing is changed it is forecast that by the end of decade deficits will be running at over 6% of GDP per year

[Economy 52,837]

I wanna add every Nation has a different tolerance for debt depending on a number of different factors.

 

Greece went into a financial meltdown when its debt hit around 140% of GDP while Japan hit a peak of 230% of GDP without a full blown acute crisis

 

The US having the worlds reserve currency and largest economy instils confidence which means the current debt of 110% of GDP can likely go a fair bit higher before major issues

 

But every economy has its limit it can handle before meltdown, even when you hold the worlds reserve currency.

 

And id argue due to some unique factors to Japan, their debt to GDP of 230% is not achiavable without a crisis in almost any other Nation perhaps even the US. So this is concerning 😬

[Lucas 31,087]

I really don't understand, what are they doing/buying that costs so much that they end up in so bad debts? Are there big countries that aren't currently in a really bad debt?

[Roughhouse Dandy 13,596]

[phantasmas 12,364]

Just a reminder that the pentagon has failed SIX audits so far

Billions unaccounted for (tho we all know where its actually going )

[Bronco 24,763]

7 minutes ago, Lucas said:

I really don't understand, what are they doing/buying that costs so much that they end up in so bad debts? Are there big countries that aren't currently in a really bad debt?

Welfare/Social Security is the primary driver. 

Like most countries now, a system designed to protect people at the bottom is facing sustained increase year on year.
There's a 2 massive economic bombs brewing - 1) the crisis in China's real estate market, 2) global welfare systems are increasingly volatile. 
Plus there's also the private equity stuff which is essentially 2008 redux if it goes under. 

[Illuminati 15,965]

1 hour ago, Lucas said:

I really don't understand, what are they doing/buying that costs so much that they end up in so bad debts?

Avocado toasts and starbucks coffees

[Sunny 12,753]

they should stop buying the $3 black coffee daily at the coffee shop so they can save up and pay the debt in 5 years...

[Economy 52,837]

2 hours ago, Bronco said:

Welfare/Social Security is the primary driver. 

Like most countries now, a system designed to protect people at the bottom is facing sustained increase year on year.
There's a 2 massive economic bombs brewing - 1) the crisis in China's real estate market, 2) global welfare systems are increasingly volatile. 
Plus there's also the private equity stuff which is essentially 2008 redux if it goes under. 

Social welfare does have a great cost but the US is also spending a fortune on military and big corporate tax cuts

 

Social welfare at least helps people who are struggling. Some of the bloaded overspending on military or race to bottom or taxes for the rich dont do much for the economy

 

Now im not in support of 70% to 80% tax rates like AOC suggests in moder economy or 35% Federal Corporate tax rates (plus whatever states add) cuz that would have competitiveness implications too and a stiffling of investment... but they do not need to be as low as they are either especially capital gains taxes for billionaires

 

The US could have some social welfare without going this deep in the hole

[Economy 52,837]

3 hours ago, Lucas said:

I really don't understand, what are they doing/buying that costs so much that they end up in so bad debts? Are there big countries that aren't currently in a really bad debt?

Most Scandinavian Countries, Germany, Australia are some developed economies with Government debt under control

 

Canada is Federally pretty good too but is a highly decentralized Country where Provincial debt is also out of control so it doesnt count

[Bronco 24,763]

1 hour ago, Economy said:

Social welfare does have a great cost but the US is also spending a fortune on military and big corporate tax cuts

 

Social welfare at least helps people who are struggling. Some of the bloaded overspending on military or race to bottom or taxes for the rich dont do much for the economy

 

Now im not in support of 70% to 80% tax rates like AOC suggests in moder economy or 35% Federal Corporate tax rates (plus whatever states add) cuz that would have competitiveness implications too and a stiffling of investment... but they do not need to be as low as they are either especially capital gains taxes for billionaires

 

The US could have some social welfare without going this deep in the hole

I mean all of that is true, and I wasn't trying to minimise the cost of republican tax cuts and American imperialism. 

Just pointing out that we have an incoming economic bomb as a result of how welfare is now essentially the government paying corporate wages and corporations taking the piss. 

[Squidward T 2,470]

Expect the stock market to crash soon. 

[Economy 52,837]

15 hours ago, Bronco said:

I mean all of that is true, and I wasn't trying to minimise the cost of republican tax cuts and American imperialism. 

Just pointing out that we have an incoming economic bomb as a result of how welfare is now essentially the government paying corporate wages and corporations taking the piss. 

I agree its a bit issue. But it didnt have to be if properly planned and if the US didnt waste so money money on things that dont add much value to economy

 

Its not just current bloated military spending or taxes on wealthy that are too low and their current cost... its also the money cost of the past, what it contributed to debt that now adds to interest payments as well that didjt have to exist (and the interest payments arent small either)

 

Social welfare is expensive. But had it been properly planned for and if money hadnt been (and continue to be) wasted on excessive things that dont matter, we could have afforded social welfare without as big of an issue

 

Countries with lower GDP Per Capita than the US have afforded social welfare without financial collapse or debt levels of the US. To me that proves its possible to do it sustainably if you truly try and care to. But the US just has had other priorites conflicting with it and you cant have everything at once because resources are not unlimited